/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/170608.mbx T R O U B L E D C O M P A N Y R E P O R T E R L A T I N A M E R I C A Thursday, June 8, 2017, Vol. 18, No. 113 Headlines B R A Z I L BRAZIL: President's Fate Rests With Top Electoral Court HAITONG BANCO: S&P Affirms 'BB-/B' Ratings; Outlook Stable C A Y M A N I S L A N D S BLUE LAKE: Shareholders' Final Meeting Set for June 21 COLORADO HOLDING: Shareholders' Final Meeting Set for June 20 FIROSTEFANI: Shareholders' Final Meeting Set for June 23 GAIA GLOBAL: Shareholder to Hear Wind-Up Report on June 20 INVESTCORP GOSI: Shareholders' Final Meeting Set for July 10 LONGPINE INVESTMENT: Shareholders' Final Meeting Set for June 23 PLATO INVESTMENTS: Members' Final Meeting Set for June 30 POSITIVE FUND: Shareholders' Final Meeting Set for June 23 SIMON MURRAY: Members' Final Meeting Set for June 13 THIRTY-EIGHT HUNDRED: Shareholders' Final Meeting Set for June 15 C H I L E COMPANIA MINERA: Files for Voluntary Bankruptcy Under Chilean Laws D O M I N I C A N R E P U B L I C DOMINICAN REP: 45 More Days to Request Nonmetallic Mining Permits M E X I C O * MEXICO: "Buy Mexican" Campaign Lacks Traction; Wages Don't Help P U E R T O R I C O PRWIRELESS INC: S&P Puts 'CCC-' CCR on CreditWatch Developing PUERTO RICO: Peaje Sues Highway Agency on Bonds Payment PUERTO RICO SALES: S&P Lowers Rating on Sr. Sales Tax Bonds to 'D' U R U G U A Y NAVIOS SOUTH: Moody's Affirms B3 CFR; Changes Outlook to Stable - - - - - =========== B R A Z I L =========== BRAZIL: President's Fate Rests With Top Electoral Court ------------------------------------------------------- Samantha Pearson and Paulo Trevisani at The Wall Street Journal report that President Michel Temer faces his biggest test yet as Brazil's top electoral court began a landmark trial to rule on whether to strip him of the presidency over alleged illegal campaign financing. The closely watched case, scheduled to last until at least Thursday, June 9 is set to decide the unpopular leader's fate and affect his plans to overhaul Latin America's biggest economy, according to The Wall Street Journal. Three years into Brazil's massive "Car Wash" corruption investigation, the Superior Electoral Tribunal, or TSE, is believed by analysts to have ample evidence that the 2014 presidential ticket benefited from illicit funding, the report notes. Herman Benjamin, the justice overseeing the trial, on dismissed last-minute requests to throw out the case, the report relays. The report discloses that Mr. Temer and Dilma Rousseff, who won the 2014 election with Mr. Temer as her vice presidential running mate, are under investigation by the TSE for allegedly using proceeds from the country's corruption scheme at oil company Petrobras to fund their campaign. Mr. Temer and Ms. Rousseff deny wrongdoing. Petrobras has said it was a victim of the scheme, the report relays. Until now, the court has moved slowly on the allegations, in part because of legal wrangling over evidence, the report relays. Legal experts also say the conservative court was reluctant to topple the business-friendly president and plunge Brazil into a new crisis just as the country emerges from its worst recession on record, the report notes. But testimony released by Brazil's Supreme Court in May in which executives of meatpacking giant JBS SA said they paid bribes to Mr. Temer as part of the country's vast corruption scandal has paralyzed his government and put pressure on the TSE to act, the report says. Mr. Temer denies he accepted bribes. "Until two weeks ago, the TSE was headed to [spare Mr. Temer] due to strictly political reasons," said Christopher Garman at political risk consultancy Eurasia Group, the report notes. "There was clear consensus in Bras°lia that stripping Temer of his mandate could generate a new political, economic and institutional crisis that political and economic elites desperately wanted to avoid," he said, notes the report. "The million-dollar question now is whether the scandal that rocked Bras°lia [in May] has inverted that logic," he added. Legal experts say the TSE's justices will likely be swayed by a desire to ease a deep political crisis -- though it is unclear if that means ousting Mr. Temer or keeping him in power, the report notes. "It's unlikely that the country's reality will not influence them," said Ivar Hartmann, a law professor at Brazil's Getulio Vargas Foundation, the report relays. Gilmar Mendes, head justice of the TSE, told reporters in May that the court's decision will be based solely on the law, and the result can't be interpreted as a way to solve the political crisis, the report relays. Mr. Temer, who is in danger of becoming a lame-duck leader, has no clear successor, the report notes. As the former vice president of Ms. Rousseff, who was impeached last year, Mr. Temer has no vice president, the report discloses. Some analysts say there is a chance that one of the TSE's seven justices could instead suspend the trial midway through to get more time to study the case, potentially delaying a ruling for weeks or even months, the report says. It takes a simple majority for a verdict, but the court must wait until the final vote to issue its ruling, and justices are permitted to change their vote at any time, the report notes. Mr. Temer could still appeal an unfavorable ruling to the Supreme Court. If the TSE rules against Mr. Temer, the PSDB party -- a major ally of the president -- would likely abandon his government, said Sen. Paulo Bauer, leader of the PSDB in the Senate, the report relays. It would be the first time in Brazil's modern history that two presidents have fallen in short succession, the report notes. The Supreme Court isn't very likely to reverse a TSE ruling, especially since three of the TSE justices also sit on the Supreme Court, Mr. Hartmann said, the report relays. If Mr. Temer is ousted, Congress would have 30 days to choose a successor, the report relays. But there is also growing pressure for snap general elections instead, especially from those who want to see former President Luiz Inacio Lula da Silva and his leftist Workers' Party, or PT, back in power, the report notes. Despite facing corruption charges himself, Mr. da Silva still polls as the country's most popular politician. Mr. da Silva denies wrongdoing, the report says. "There is a strong desire in the party for a Lula comeback," the report quoted Vicente Paulo da Silva, one of the PT's founders, as sying. "[Our opponents] don't want a direct vote because they fear Lula," Mr. da Silva added. However, if the TSE rules in Mr. Temer's favor -- or even decides to put the case on hold --the president would be given critical breathing room, the report notes. He would then be able to work on rebuilding his coalition and pushing ahead with pension changes that economists say are necessary to avoid a full-blown fiscal crisis, the report relays. While Mr. Temer would still face a lengthy corruption investigation by the Supreme Court, as well as impeachment motions in Congress, a victory at the TSE could allow him to remain in power until scheduled elections in October 2018, the report relays. "Without a shove from the judiciary, it will be difficult to end his mandate given there is no clear substitute to Temer," said Rafael Cortez, a political scientist at Sao Paulo-based consultancy Tendencias, the report notes. He added that impeaching him could take as long as a year, making it relatively pointless, the report adds. As reported in the Troubled Company Reporter-Latin America on May 24, 2017, S&P Global Ratings placed its 'BB' long-term foreign and local currency sovereign credit ratings on the Federative Republic of Brazil on CreditWatch with negative implications. S&P also affirmed the short-term foreign and local currency ratings at 'B'. The transfer and convertibility assessment is unchanged at 'BBB-'. In addition, S&P placed the 'brAA-' national scale rating on CreditWatch with negative implications. HAITONG BANCO: S&P Affirms 'BB-/B' Ratings; Outlook Stable ---------------------------------------------------------- S&P Global Ratings said that it affirmed its 'BB-/B' global scale on Haitong Banco de Invetimento do Brasil S.A. (Haitong Brasil). The outlook on long-term global scale rating remains stable. S&P also kept its 'brA/brA-2' national scale ratings on CreditWatch negative. The bank's stand-alone credit profile (SACP) remains 'b-'. S&P bases its ratings on Haitong Brasil on its core subsidiary status, given its significant revenue contribution, the group's ownership, strategic importance, and the parent's long-term commitment. In addition, the bank has become a significant earnings contributor for its parent. Haitong Brasil is fully integrated with its parent, and S&P believes the rest of the group will provide support to the bank under any foreseeable circumstances, except in an event of sovereign distress. Due to Haitong Brasil's core subsidiary status, S&P equalizes the ratings on it with the ratings on its parent. Haitong Brasil's stand-alone assessment reflects its concentrated business profile that mostly consists of investment banking activities, which S&P believes to be more sensitive to market perceptions of creditworthiness. S&P also bases its ratings on the bank on S&P's forecasted risk-adjusted capital (RAC) ratio of about 5.6% for the next two years. Moreover, S&P's assessment incorporates the potential risks stemming from the group's strategy to expand rapidly in various countries. The ratings also reflect S&P's view of Haitong Brasil's funding structure that still has narrow diversification among stable funding sources and its liquidity position that provides adequate cushion to cope with cash outflows over the next 12 months. Under S&P's bank criteria, it uses its Banking Industry Country Risk Assessment's (BICRA) economic risk and industry risk scores to determine a bank's anchor, the starting point in assigning an issuer credit rating. S&P's anchor for a commercial bank operating only in Brazil is 'bb+', based on the country's economic risk score of '7' and an industry risk score of '5'. The stable outlook on Haitong Brasil's long-term global scale rating reflects the one on Haitong Bank and S&P's view that the ratings on the bank will move accordingly with its parent's, given the subsidiary's core status. S&P believes the rest of the group will provide support to the bank under any foreseeable circumstances except in an event of sovereign distress. The CreditWatch with negative implications on the national scale rating reflects that on Brazil's sovereign rating and S&P's view that the rating should move in tandem with the latter. S&P believes that there is at least one-in-two possibility that it could lower the sovereign rating on Brazil in the next 90 days. A positive rating action on the bank would follow the same action on its parent as long as its ratings are not higher than those on Brazil. S&P believes the group would provide support to the bank under any foreseeable circumstances, except in an event of sovereign distress. A negative rating action on the bank would follow a downgrade of its parent or if S&P revises Haitong Brasil's group status downwards. A negative action on the bank on the national scale could also occur if S&P was to downgrade the sovereign. ========================== C A Y M A N I S L A N D S ========================== BLUE LAKE: Shareholders' Final Meeting Set for June 21 ------------------------------------------------------ The shareholders of Blue Lake Incorporation will hold their final meeting on June 21, 2017, at 10:00 a.m., to receive the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Blue Lake Incorporation Marcos Antonio Sorrilha Avenida Heraclito Fontoura Sobral Pinto, 551 Guapore 11, Casa 45, Jardim Botanico Ribeirao Preto, SP, 14022-000 Brazil COLORADO HOLDING: Shareholders' Final Meeting Set for June 20 ------------------------------------------------------------- The shareholders of Colorado Holding Ltd will hold their final meeting on June 20, 2017, at 10:00 a.m., to receive the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Ita Global Trust Ltd. Suite 4210 Canella Court 48 Market Street, Camana Bay P.O. Box 32203 Grand Cayman KY-1208 Cayman Islands FIROSTEFANI: Shareholders' Final Meeting Set for June 23 -------------------------------------------------------- The shareholders of Firostefani will hold their final meeting on June 23, 2017, to receive the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: CDL Company Ltd. P.O. Box 31106 Grand Cayman KY1-1205 Cayman Islands GAIA GLOBAL: Shareholder to Hear Wind-Up Report on June 20 ---------------------------------------------------------- The shareholder of GAIA Global Investment Fund Limited will hear on June 20, 2017, at 10:00 a.m., the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: An-Hung Chen Gaia Global Holding Limited 5th Floor No. 6, Lane 224, Jixian Rd. Luzhou District, New Taipei City Taiwan Telephone: +886 952 003 832 Facsimile: +1 345 949 8613 INVESTCORP GOSI: Shareholders' Final Meeting Set for July 10 ------------------------------------------------------------ The shareholders of Investcorp Gosi Saudi Arabia Investments S.P.C. will hold their final meeting on July 10, 2017, at 10:00 a.m., to receive the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Westport Services Ltd. c/o Evania Ebanks P.O. Box 1111 Grand Cayman KY1-1102 Cayman Islands Telephone: (345) 949 5122 Facsimile: (345) 949 7920 LONGPINE INVESTMENT: Shareholders' Final Meeting Set for June 23 ---------------------------------------------------------------- The shareholders of Longpine Investment Corp. will hold their final meeting on June 23, 2017, at 10:00 a.m., to receive the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Longpine Investment Corp. c/o Jeronymo Coimbra Bueno Filho Rua Leoncio Correa, 161 Leblon Rio De Janeiro, RJ 22450120 Brazil PLATO INVESTMENTS: Members' Final Meeting Set for June 30 --------------------------------------------------------- The members of Plato Investments Limited will hold their final meeting on June 30, 2017, to receive the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Zedra Directors (Cayman) Limited c/o Felisiana Ebanks 136 Shedden Road One Capital Place, 3rd Floor P.O. Box 487 George Town Grand Cayman KY1-1106 Cayman Islands Telephone: +1 (345) 914-5424 POSITIVE FUND: Shareholders' Final Meeting Set for June 23 ---------------------------------------------------------- The shareholders of The Positive Fund SPC will hold their final meeting on June 23, 2017, at 10:00 a.m., to receive the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: David A.K. Walker c/o Jodi Jones P.O. Box 258 Grand Cayman, KY1-1104 Cayman Islands Telephone: (345) 949 7000 Facsimile: (345) 945 4237 SIMON MURRAY: Members' Final Meeting Set for June 13 ---------------------------------------------------- The members of Simon Murray & Co. China Fund Limited will hold their final meeting on June 13, 2017, to receive the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Tung Yam Red Gate Asset Management Company Limited c/o Maples and Calder, Attorneys-at-law PO Box 309, Ugland House Grand Cayman KY1-1104 Cayman Islands THIRTY-EIGHT HUNDRED: Shareholders' Final Meeting Set for June 15 ----------------------------------------------------------------- The shareholders of Thirty-Eight Hundred Investments Limited will hold their final meeting on June 15, 2017, at 10:10 a.m., to receive the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Walkers Liquidations Limited c/o Cayman Corporate Centre 27 Hospital Road, George Town Grand Cayman KY1-9008 Cayman Islands Telephone: +1 (345) 949 0100 ========= C H I L E ========= COMPANIA MINERA: Files for Voluntary Bankruptcy Under Chilean Laws ------------------------------------------------------------------ Cerro Grande Mining Corporation reported that further to its News Release dated May 12, 2017 announcing the closure of its Pimenton Mine and on the advice of its Chilean lawyers, the Directors and Management of Compania Minera Pimenton in consultation with the Board of Directors of Cerro Grande Mining Corporation have taken the decision to place Compania Minera Pimenton, effective as of the evening of June 1, 2017, into voluntary bankruptcy versus waiting for its creditors to place Pimenton into involuntary bankruptcy. Under Chilean law, a court appointed bankruptcy Liquidator will take possession of Compania Minera Pimenton and its assets and is responsible for all ongoing costs of Pimenton until they are successful in obtaining the sale or liquidation of Compania Minera Pimenton in both voluntary and involuntary filings. There are no bonds in place to cover the reclamation procedures at Pimenton and none were requested by Sernageomin, the Chilean government mining agency. The Liquidator will be responsible for all mine closure costs, if any, until the Liquidator is successful in selling the mine, claims and/or liquidating the assets of Compania Minera Pimenton. All men on the payroll of Compania Minera Pimenton have been terminated and their salaries and severance costs will be paid for by the Liquidator from the sale or liquidation of Compania Minera Pimenton. Under Chilean law, salary and some severance costs must be paid first and once paid, the creditors of the mine are second to be paid. The Liquidator is paid his fees from the proceeds of the sale of Compania Minera Pimenton or liquidation of its assets. The other subsidiaries of CEG, including Compania Minera Til Til, Compania Minera Catedral, Compania Minera Tordillo, Compania Minera Bandurrias and Compania Minera Cal Norte are not affected by the bankruptcy of Compania Minera Pimenton. No Officers or Directors of Cerro Grande Mining Corporation have resigned. The transfer Agent is still in place. Stephen W. Houghton, Chief Executive Officer of Cerro Grande Mining Corporation has signed off on the contents of this Press Release. =================================== D O M I N I C A N R E P U B L I C =================================== DOMINICAN REP: 45 More Days to Request Nonmetallic Mining Permits ----------------------------------------------------------------- Dominican Today reports that the Environment Ministry announced a 45-day extension on the period to initiate the paperwork to grant environmental permits for nonmetallic mining operations. Resolution No. 0001/2017 -- issued January and which expired on June 4 -- seeks to regulate, expedite and make the authorizations to extract materials more transparent, according to Dominican Today. The measure establishes greater controls of the mechanisms and supervision on mining's environmental impact and to assure the remediation of the damages it usually causes, the report relays. Moreover, Environment will automatically reject projects within protected areas, along rivers, streams and wetlands as well as those located within 150 meters of the coast; areas of high risk for populations or public service infrastructure, among others, the report notes. Also rejected will be the extraction of materials in areas declared "of tourist interest, world heritage or protected archaeological sites," the report relays. Specific projects will require the use of photogrammetric measurement systems, the report adds. As reported in the Troubled Company Reporter-Latin America on May 1, 2017, S&P Global Ratings affirmed its 'BB-/B' long- and short-term sovereign credit ratings on the Dominican Republic. The outlook remains stable. The transfer and convertibility (T&C) assessment is unchanged at 'BB+'. =========== M E X I C O =========== * MEXICO: "Buy Mexican" Campaign Lacks Traction; Wages Don't Help ----------------------------------------------------------------- Juan Montes at The Wall Street Journal reports that after U.S. President Donald Trump took office in January, Mexico's government and trade groups encouraged Mexicans to buy domestic goods in a campaign that included the installation of large banners across the country displaying the standard bar code for products made in Mexico. The goal was to ride a wave of nationalism provoked by Mr. Trump's protectionist rhetoric, his insults of Mexicans during the campaign and his plans to build a "beautiful, big" wall along the U.S.-Mexico border, according to The Wall Street Journal. But so far, the strategy doesn't seem to have had a great impact, though inflation and low wages don't help, the report notes. Seasonally adjusted consumption of domestic goods fell 0.9% in March from the previous month, following a 0.2% contraction in February, the national statistics agency said, the report relays. Consumption of national goods was also down 0.1% from a year earlier. The main reason for the decline is rising inflation that has hurt purchasing power, said Viridiana R°os, a researcher at the Washington-based Wilson Center who specializes in Mexico's economy, the report notes. Average wages in Mexico fell 1.8% in real terms in March from the year before, due to a large extent to a big jump in consumer prices since January, the report relays. A weak peso at the beginning of the year and higher gasoline prices propelled annual inflation to an eight-year high of 6.17% in early May, the report notes. Employment has continued to grow, although wages remain low, averaging $2.20 per hour compared with $21 in the U.S, the report discloses. "With such low wages, you can't build in Mexico a robust internal demand. That's the big problem," Ms. Rios said, the report relays. Some goods, such as medicines, are mainly provided by foreign companies, and other local products are often not competitive, even after a strong peso depreciation during the last two years, the report notes. "I do care about my country, but I care more about my pocket," said 83-year-old Marisa Dominguez recently as she reluctantly tossed two imported cans of soup, which were on sale, into her supermarket shopping cart, the report relays. In early February, when tensions in the bilateral relationship were running high, the government launched the campaign to promote the purchase of domestic products, such as processed food, toys and household appliances, the report relays. It displayed the Made in Mexico logo, the symbol of a Mexican eagle that was first used in 1978 when Mexico was a closed economy, the report discloses. Many Mexicans replaced their social network avatars with the green, white and red Mexican flag, the report says. Well-established consumer habits, and the fact most Mexicans haven't felt any major economic harm so far from Trump administration policies, could also help explain the data, some analysts said, the report relays. Polls show 90% of Mexicans disapprove of Mr. Trump, but the economy maintained steady growth in the first quarter, and the peso has appreciated 20% against the U.S. dollar since February, the report notes. Consumption of imported goods, after declining in much of 2016, was up 0.3% in March from the month before and up 3.7% from the year before, benefiting from the recent appreciation of the peso, the report relays. A U.S. withdrawal from the North American Free Trade Agreement seems increasingly improbable, and Mr. Trump's rhetoric against Mexico has softened since he took office, the report notes. The latest consumption data suggest that the reality of interconnected economies has greater weight than a short-lived wave of nationalism that included anti-Trump marches and calls on social media for boycotts of U.S. companies and products, the report discloses. Since the 1980s, Mexico has pursued an export-oriented economic model that has become the country's growth engine, and it's opened its markets to imports of myriad consumer products, the report says. That's a far cry from the protectionism of the 1970s when state-owned companies produced everything from refrigerators to cars and train carriages under the slogan, "What's made in Mexico is well made," the report adds. ====================== P U E R T O R I C O ====================== PRWIRELESS INC: S&P Puts 'CCC-' CCR on CreditWatch Developing ------------------------------------------------------------- S&P Global Ratings said it placed its 'CCC-' corporate credit rating on San Juan, Puerto Rico-based PRWireless Inc. and S&P's 'CCC-' issue rating on its senior secured debt on CreditWatch with developing implications. "The CreditWatch placement follows the disclosure that the company would have been in breach of its bank facility financial maintenance covenants had it not received waivers and reflects the uncertainty regarding the company's ability to obtain future waivers or an amendment to its credit agreement," said S&P Global Ratings credit analyst Ryan Gilmore. S&P could raise the ratings on PRWireless at least one notch if the company is able to obtain covenant relief with favorable terms and sufficient headroom over the next 12 to 18 months. S&P believes the new joint venture with Sprint could result in an improved credit profile for PRWireless, potentially aiding the company's ability to receive a waiver or amend covenant levels. Conversely, S&P could lower the ratings one notch or more if PRWireless is unable to obtain waivers and an amendment from its lenders that provides sufficient cushion under its covenants since S&P believes a default would be a virtual certainty. S&P intends to resolve the CreditWatch placement over the coming months when more information regarding a potential amendment to the credit agreement becomes available. S&P's resolution of the CreditWatch will incorporate additional clarity with respect to the joint venture and S&P's longer-term view of the combined business, including subscriber trends, churn, and potential cash flow generation. If PRWireless is able to obtain covenant relief with favorable terms and sufficient headroom over the next 12 to 18 months, S&P could raise the rating at least one notch. Conversely, if PRWireless is unable to obtain a waiver or amendment from its lenders, S&P could lower the rating one notch or more. PUERTO RICO: Peaje Sues Highway Agency on Bonds Payment ------------------------------------------------------- BankruptcyData.com reported that Peaje Investments (Plaintiff) filed with the U.S. Bankruptcy Court a verified complaint against defendants Puerto Rico Highways & Transportation Authority (HTA) and its executive director, currently the Hon. Carlos Contreras Aponte; the Commonwealth of Puerto Rico and its Governor, currently the Hon. Ricardo Rossello; the Puerto Rico Fiscal Agency and Financial Advisory Authority (AAFAF) and its executive director, currently the Hon. Gerardo Portela Franco and Hon. Raul Maldonado Gautier and Hon. Jose Ivan Marrero Rosado. The complaint notes, "As a result of this ongoing diversion, the Fiscal Agent has insufficient funds to satisfy the entire payment of principal and interest due on Plaintiff's bonds in July 2017. Moreover, HTA and its Executive Director have indicated that they have no intention of depositing the Toll Revenues with the Fiscal Agent as required under the 1968 Resolution and applicable law . . . . Through this adversary proceeding, Plaintiff seeks to enforce and protect its lien and other rights in the pledged Toll Revenues in the manner provided under PROMESA and other applicable law. The immediate relief sought herein, however, is limited to what is necessary to protect Plaintiff's rights." About Puerto Rico Puerto Rico is a self-governing commonwealth in association with the United States. The chief of state is the President of the United States of America. The head of government is an elected Governor. There are two legislative chambers: the House of Representatives, 51 seats, and the Senate, 27 seats. The governor-elect is Ricardo Antonio "Ricky" Rossello Nevares, the son of former governor Pedro Rossello. In 2016, the U.S. Congress passed PROMESA, which, among other things, created the Financial Oversight and Management Board and imposed an automatic stay on creditor lawsuits against the government, which expired May 1, 2017. The members of the oversight board are: (i) Andrew G. Biggs, (ii) Jose B. Carrion III, (iii) Carlos M. Garcia, (iv) Arthur J. Gonzalez, (v) Jose R. Gonzalez, (vi) Ana. J. Matosantos, and (vii) David A. Skeel Jr. On May 3, 2017, the Commonwealth of Puerto Rico filed a petition for relief under Title III of the Puerto Rico Oversight, Management, and Economic Stability Act ("PROMESA"). The case is pending in the United States District Court for the District of Puerto Rico under case number 17-cv-01578. A copy of Puerto Rico's PROMESA petition is available at http://bankrupt.com/misc/17-01578-00001.pdf On May 5, 2017, the Puerto Rico Sales Tax Financing Corporation (COFINA) commenced a case under Title III of PROMESA (D.P.R. Case No. 17-01599). Joint administration has been sought for the Title III cases. On May 21, 2017, two more agencies -- Employees Retirement System of the Government of the Commonwealth of Puerto Rico and Puerto Rico Highways and Transportation Authority (Case Nos. 17-01685 and 17-01686) -- commenced Title III cases. U.S. Chief Justice John Roberts has named U.S. District Judge Laura Taylor Swain to preside over the Title III cases. The Oversight Board has hired as advisors, Proskauer Rose LLP and O'Neill & Borges LLC as legal counsel, McKinsey & Co. as strategic consultant, Citigroup Global Markets as municipal investment banker, and Ernst & Young, as financial advisor. Martin J. Bienenstock, Esq., Scott K. Rutsky, Esq., and Philip M. Abelson, Esq., of Proskauer Rose LLP; and Hermann D. Bauer, Esq., at O'Neill & Borges LLC are onboard as attorneys. Prime Clerk LLC is the claims and noticing agent. Prime Clerk maintains a case web site at: https://cases.primeclerk.com/puertorico Jones Day is serving as counsel to certain ERS bondholders. Paul Weiss is counsel to the Ad Hoc Group of Puerto Rico General Obligation Bondholders. PUERTO RICO SALES: S&P Lowers Rating on Sr. Sales Tax Bonds to 'D' ------------------------------------------------------------------ S&P Global Ratings has lowered its rating on Puerto Rico Sales Tax Financing Corp.'s (COFINA) senior sales tax bonds to 'D' from 'CC' on non-disbursement by the trustee of scheduled monthly interest payments due June 1, 2017, in compliance with an order of the U.S. District Court for the District of Puerto Rico. On May 30, the court ordered the trustee to interplead future payments of principal and interest on both the senior and subordinated COFINA sales tax bonds by holding those funds in their existing accounts until a final order of the court has been entered directing the timing and manner of disbursement of funds. At this time, the court's order has only affected the disbursement of interest payments on the COFINA sales tax bonds that require current monthly interest payments; principal payments on certain of the COFINA sales tax bonds are due Aug. 1, 2017. "We understand that the trustee holds funds sufficient to make debt service payments through at least Aug. 1, 2017, on both the senior and subordinated sales tax bonds," said S&P Global Ratings credit analyst David Hitchcock. "However, due to disputes between senior and subordinate bondholders regarding the application of funds held by the trustee and a dispute between the trustee and COFINA as to whether an event of default has occurred, the court has stayed all claims to the funds pending a further order of the court," Mr. Hitchcock added. An acceleration, if determined by the court to have occurred and/or permitted by the court under applicable law, could potentially affect relative recovery between senior and subordinated bondholders. All parties claiming a right to the disputed funds are required to assert their rights to the funds in the court proceeding. ============= U R U G U A Y ============= NAVIOS SOUTH: Moody's Affirms B3 CFR; Changes Outlook to Stable ---------------------------------------------------------------- Moody's Investors Service affirmed the B3 corporate family rating of Navios South American Logistics Inc., as well as the B3 rating on Navios Logistics' $375 million senior unsecured notes due 2022. Moody's has also changed the outlook for all ratings to stable from negative. RATINGS RATIONALE "This rating action reflects improvements in the liquidity and performance of Navios Holdings, the majority owner of Navios Logistics and the manager of its fleet," says Maria Maslovsky, Vice President-Senior Analyst at Moody's and the lead analyst for Navios. "The favourable resolution of its dispute with Vale regarding a 20-year contract which is expected to generate $35 million of EBITDA per annum leads us to expect an improved revenue and EBITDA in the next twelve to 24 months," adds Ms. Maslovsky. The rating action to revise the outlook to stable follows Moody's recent change in the outlook for Navios Maritime Holdings, Inc. to positive from negative. Navios Holdings owns 63.8% of Navios South American Logisitics and manages its fleet; therefore, the financial and operational stability of this entity is very important for Navios Logistics. One of the key drivers of the action on Navios Holdings was the strengthening in the dry bulk market resulting in the dramatic improvement in the time charter rates and leading us to expect Navios Holdings to generate neutral to positive free cash flow in 2017 following negative $114 million free cash flow in 2016. Moody's includes capital expenditures in its calculation of the free cash flow. Another positive development for Navios Logistics is the affirmation by a London arbitration tribunal of its 20-year contract with Vale S.A. (Ba2 positive) related to an iron ore port facility pursuant to which Navios Logistics is expected to generate approximately $35 million per annum minimum EBITDA. The contract is expected to generate over $1.0 billion EBITDA over its life and contributes significantly to Navios Logistics' performance. Offsetting the positive developments with respect to the Vale contract and at Navios Holdings, the end markets where Navios Logistics operates have experienced some pressure in 2016. This weakness was driven by lower throughput in the dry terminal, which was affected by weak Uruguayan soybean production due to heavy rains earlier in the year and reduced shipments of Paraguayan corn. The barge business was also impacted by lower voyage and time charter revenues due to the expiration of certain iron ore transportation contracts and increased operating and other costs. The expiration of these contracts occurred during the low season for grains, and Navios Logistics was unable to re-charter the vessels. In 2017, Moody's expects the terminals to perform significantly better due to the commencement of the Vale contract in the second half while the barge business may continue to lag (although 2017 harvest is likely to be better) and the cabotage business is expected to be in line with 2016. In the first quarter of 2018 a new river tanker is expected to be delivered with a 5- year charter which will boost cabotage earnings. As a result of the challenges experienced by Navios Logistics in 2016, its leverage measured as debt/EBITDA deteriorated to 7.0x at year-end 2016 from 5.3x the year before, its coverage declined to 2.4x from 2.8x over the same period and its free cash flow was negative for the year (after capex). All metrics include Moody's standard adjustments. Moody's anticipates NSAL's leverage to trend down toward 6.0x in 2017. Navios Logistics' liquidity is adequate with cash of approximately $70 mm at March 31, 2017 and Moody's expected FFO of $41 mm in 2017. NSAL's largest debt maturity is in 2022 when its senior unsecured bonds are due; its other financings are amortizing. Positively, the majority of the company's tangible assets are unencumbered. The stable rating outlook reflects Moody's expectations that the company's financial profile will improve from its year-end levels in the next 12-18 months; in particular, Moody's anticipates Navios Logistics to maintain adequate liquidity and moderately reduce leverage. Positive rating movement would be likely if the rating of Navios Holdings is upgraded and, at the same time, NSAL maintains debt/EBITDA below 5.5x and (fund from operations + interest)/interest above 2.5x, together with an adequate liquidity profile. Negative rating pressure could arise if (1) NSAL's liquidity profile weakens materially; (2) its leverage deteriorates further from year-end 2016 level of 7.0x debt/EBITDA; or (3) if the rating of Navios Holdings is downgraded. The principal methodology used in these ratings was Global Shipping Industry published in February 2014. Navios South American Logistics Inc. is one of the principal logistics companies operating in the Hidrovia Region river system, which flows through Argentina, Brazil, Bolivia, Paraguay and Uruguay. The company's operations comprise waterborne transportation services for liquid and dry cargoes, as well as port, storage and related services. In 2016, NSAL generated revenues of $220 million and EBITDA of $68 million (as reported by the company). *********** Monday's edition of the TCR-LA delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR-LA editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR-LA constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR-LA editor holds some position in the issuers' public debt and equity securities about which we report. Tuesday's edition of the TCR-LA features a list of companies with insolvent balance sheets obtained by our editors based on the latest balance sheets publicly available a day prior to publication. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. Submissions about insolvency-related conferences are encouraged. Send announcements to conferences@bankrupt.com *********** S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter-Latin America is a daily newsletter co-published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA, Marites O. Claro, Joy A. Agravante, Rousel Elaine T. Fernandez, Valerie U. Pascual, Julie Anne L. Toledo, Ivy B. Magdadaro, and Peter A. Chapman, Editors. Copyright 2017. All rights reserved. ISSN 1529-2746. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR Latin America subscription rate is US$775 per half-year, delivered via e-mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are US$25 each. For subscription information, contact Peter A. Chapman at 215-945-7000 or Joseph Cardillo at 856-381-8268. * * * End of Transmission * * *